THE SILENT STRATEGIST

Dilip Shanghvi's focus on research and high-margin drugs future-proofs Sun Pharma

- BY NEETU CHANDRA SHARMA

DILIP SHANGHVI is not one for flamboyant statements or headline-grabbing moves. Yet, over the decades, the soft-spoken Chairman & Managing Director of Sun Pharma has turned the company from a small maker of generics into a global pharmaceutical giant with a revenue of $5.8 billion.

While Sun Pharma built its name in generics, it is now betting on specialty drugs, also called innovative drugs, a segment that already accounts for a fifth of its turn- over. These are high-value, patent-protected medicines that treat complex conditions, unlike generics, which are mass-market, off-patent medicines. These often require extensive research and clinical trials, making them more expensive but also more effective.

But the journey will be tough. The once lucrative US generics market has become volatile with threat of reciprocal tariffs by the Trump government, price erosion, consolidation, and regulatory scrutiny. Also, increased competition, price caps, and consolidation among large buyers are squeezing manufacturers’ margins. Sun Pharma, too, felt the heat. In the third quarter of FY18, the company’s US sales dropped by 35%, primarily because of pricing pressure in the US generics market and a dip in sales of some generic products. Shanghvi, 69, saw the storm coming. Over the past decade, he has repositioned Sun Pharma, diversifying its revenue streams by adding innovative drugs in its product portfolio in the dermatology, ophthalmology, and oncodermatology segment and continuing to expanding in India and emerging markets

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